Tuesday July 31, 2012

LENOX -- Following the failure of last month's online auction to sell the historic Cornell Inn at the northern gateway to downtown Lenox, the property went back on the market and a deal is now pending to sell the 28-room, four-acre bed and breakfast to an unidentified buyer for $800,000.

The highest bid received during the three-day auction was $775,000. The bidding had opened at $425,000, the minimum.

The deal was not confirmed by an Atlanta-based asset-firm representing the seller, WestLB, a commercial bank based in Dusseldorf, the capital of the German state of North Rhine-Westphalia.

But the former property manager of the inn told The Eagle on Monday that the sale is in progress.

The now-dissolved bank, which had been partially state-owned, had been forced to dispose of its U.S. assets because it was broken up on July 1 to meet a European Union deadline, following years of losses from bad assets, scandal and controversy.

Eiran Gazit, the owner of the Gateways Inn with his partners, Metro Funding Corp of Paramus, N.J., said he was approached last week to see if he would top the $800,000 offer, but he and Metro decided to pass because, he explained, "my hands are full with a very successful season at the Gateways."

"We wish the new owner the best of luck and success," Gazit said.

The reported sale price of the Cornell is less than half the assessed value of the inn's three buildings and land, placed at $1,733,000, according to Town Hall records, and less than one-quarter of the original asking price when it first went on the market four years ago.

The inn has been doing strong business this summer, with rates from $135 mid-week to a range of $225 to $275 on weekends, with a two-night minimum. Many weekdays and upcoming weekends are either entirely or nearly sold out.

Lance Fyfe, the current innkeeper at the Cornell, said he had been instructed not to discuss any deal with news media.

Chris Ferguson, an assistant vice president at TriMont Real Estate Advisors in Atlanta, representing the German bank, said he was bound by confidentiality agreements regarding any Cornell transaction.

The inn, at 203 Main St., has three buildings with 28 guest rooms, as well as innkeeper's quarters. The oldest structure, the MacDonald House, dates from 1777, when it was built as a private home. The Main House, a Victorian building completed around 1880, was originally the residence of the Cornell family.

The Carriage House, with six rooms and two suites, needs major structural overhaul, as acknowledged in photos provided to prospective bidders on the property.

Since 1986, the Cornell has been operated as a B&B, with significant renovations in 2006.

When first placed on the market by Century 21 Franklin Street Realty in 2008, it was listed at $3.9 million, even though its year-round occupancy rate was about 30 percent and its gross revenues were about $650,000. A private appraiser had valued the property at $4,185,000.

The price was lowered to $3.5 million a year later, with occupancy down to 25 percent and gross revenues put at $560,000.

The inn's structural im prove ments are expected to cost nearly $1 million.

Gazit, a tourism consultant, managed the property for about a year, beginning in December 2009, after the former owners closed it abruptly, leaving at least 30 guests with advance bookings stranded. After the German bank acquired the property, Gazit departed and purchased the Gateways on Walker Street for $2.5 million last December.

To contact Clarence Fanto:
cfanto@berkshireeagle.com,
or (413) 496-6247.
On Twitter: @BE_cfanto.